Eva Closius, Respondent, v. Herman Reiners, Appellant

Eva Closius, Respondent, v. Herman Reiners, Appellant. Pleading—representations as to future events — the remedy is in equity, not at law—parties. The complaint in an action alleged that the plaintiff gave to a firm, in which the defendant was the principal partner, an usurious note, and that she being unable to pay the same, the defendant represented to her that she had better confess judgment in favor' of the firm;, that she need not take any legal advice, and that if she would confess judgment he would protect her interest upon the sale thereunder, and would see that upon it she should receive a fair market price for a life estate which she had in certain real property based on a • valuation of $20,000; that her equity would be a considerable one, and that, relying on these representations, she confessed a judgment. The complaint further alleged that the representations were false and known to be such, and were made to. deceive her; that her interest in the real property was sold upon an execution issued on the judgment and was purchased by the defendant and his partners for the amount of the judgment, this being only a small percentage of-the alleged value of her life estate, and asked for judgment for the value of her life estate. Held, that as the alleged false representations were not false as to facts existing at the time they were made, but related solely to future events, the action could not be maintained as one at law; That such facts might entitle the plaintiff to relief in equity either by way of vacating the sale or of redeeming the property sold from it or by an accounting; That the defendant’s partners, as well as the defendant, were necessary parties to an equitable action. Appeal by the defendant, Herman Reiners, from an interlocur tory judgment of the Supreme Court in favor of the plaintiff, entered in the office of the clerk of the county of Kings on the 17th day of December, 1896, upon the decision of the court rendered after a trial at the Kings County Special Term overruling his demurrer to the plaintiff’s .complaint. The plaintiff, by her complaint, alleges that by his will, which was admitted to probate, Joseph Closius, deceased, devised the residue of his estate, both real and personal, in trus-t to the plaintiff (his wife) for her use and benefit during her life ; that afterwards, on May 11, 1891, she was indebted to the firm of IT. & H. Reiners, of which the defendant was the principal partner, in the sum of $685.79 ; that the plaintiff sought and obtained from that firm the loan of $721.21 in money ; that plaintiff was thereupon required to and did give to the firm her promissory note for $1,500, payable in four months, the defendant charging up against her $90, being one year’s interest on $1,500, all of which was usurious and illegal; that on its maturity it was renewed for two additional months; that in November, 1891, when the note became due, the plaintiff was unable to pay it, and that. the defendant then represented to her that she; had. better confess judgment in favor of the firm; that it was unnecessary for her to take any legal advice; that if she would so confess the defendant would protect her interest on' the sale that was to follow; that the property in which she had a life estate was worth $20,000 ; that he would see that her life estate would be based on that valuation; that on the sale she would receive a fair market price for her life interest, and that all he wanted was the amount due the firm; that the balance would go to her, and that her equity was- a considerable one, and that if she implicitly confided in him he would act for her and in her sole interest; that the plaintiff, believing these representations to be true and relying thereon, confessed judgment November 15, 1891, for $1,532.92. The plaintiff further alleges “ that said representations were, as a matter of fact, false and' fraudulent and untrue and knowingly as, and 'made to deceive her,” and that her “ interest in her husband’s real estate was sold in disregard of defendant’s representations and in violation thereof.” The plaintiff proceeds to allege that her interest in such real estate was sold on execution issued on the judgment and was purchased by the defendant and his partners for the amount of their judgment ; that the sale was not properly advertised, and was conducted in their interest and not in the interest of the plaintiff, as the defendant had agreed; that the plaintiff has received no money from him, and that she is informed and believes that her life estate in the premises amounted to $8,393, for which sum she demands judgment against the defendant. Ira Leo Bamberger, for the appellant. Charles F. Brandt, for the respondent. Sic. [MAJORITY — Bradley, J.:] Bradley, J.: The action is apparently one at law to recover damages.' It is difficult to see in. the allegations of the complaint any support for it on that theory. It seems to have been contemplated when the judgment was confessed that the plaintiff’s life estate would be sold on the execution. The action is not founded upon any undertaking of the defendant to pay any sum to the plaintiff, but she seeks to charge him upon his representations, which she alleges were false, that he would protect her interest on the sale ; that he ivould see that her life estate would be based on a valuation of $20,000, and that at the sale she would receive a fair market price. Those representations were not false as to any fact existing when they were made, but had relation solely to future events within their contemplation, and the alleged fraud was in the supposed purpose of the defendant not to thus enable the plaintiff to take the benefits which he represented that she would through his instrumentality derive from the sale of her life estate upon the execution issued upon the judgment confessed by her. This state of facts might in equity enable her to obtain relief by way of a vacation of the sale or a redemption of the property from it, or if, pursuant to the sale, the property had passed beyond the defendant’s control, to require him to render an account for it in such manner and to such extent as the equities of the plaintiff, in view of the representations made by the defendant to her, should require, as those alleged tend to show that the relation he assumed to the plaintiff was in some sense fiduciary. Such, however, is not the purpose of the action, as represented by the complaint, nor does the complaint contain all the allegations requisite to its support for that purpose, nor are all the necessary parties before the court for such, equitable relief. The purchase was made by the defendant and his associate partner or partners of the firm of H. & H. Reiners; and to an action by the plaintiff for relief founded on such facts the defendant’s partners are necessary parties, since they joined with him in the purchase. It may be observed that they made the purchase in satisfaction of a precedent debt due from the plaintiff to the firm, and they cannot, as against the plaintiff, derive any advantage from title taken through the fraudulent conduct of the defendant, not available to him. It is not alleged that the defendant represented or promised that he would purchase the property on the execution sale, or that it would be bid off at such sale for any specific sum, or for an amount sufficient to cover the value of the plaintiff’s life estate on the basis of valuation mentioned in the complaint; but it is alleged that he represented “that he would see that her life estate would be based on that valuation, and that on the sale she would receive á fair market price for her life interest.” • The alleged representation that the plaintiff would derive such benefit from the sale must be deemed to have-been on the assumption, and.subject to the condition, that the purchase would result in title to such life estate, perfected by conveyance made pursuant t-o the sale upon the execution. The sale alone: vested no title in the purchaser, nor is it alleged that any title was-derived from the sale. It is unnecessary to inquire-whether the inference of such fact, would, as matter of evidence, arise upon proof of the facts alleged.' No such inference is permitted in the pleading; nor can it be assumed that the plaintiff has been divested of the possession ¿nd enjoyment of the property. It is not important for the purposes of the present case whether,, by the allegation that the sale was not properly advertised, the plaintiff intended to charge that it was insufficient for want of- legality or otherwise, as, in either view, it cannot aid the plaintiff here, however much it may be available as a fact for. equitable relief; and for the purposes of this action, the fact that the defendant exacted and included in the note made by the plaintiff a bonus in excess of the-legal rate of interest is not available. The plaintiff does hot seek to set aside the judgment or the sale of the property founded upon it, but the allegations of her complaint proceed for relief in affirmance of both. As before suggested, the alleged representations-relating to events in contemplation, and being promissory only, constitute no support to the action as brought, and for the relief sough t-by it. (Farrington v. Bullard, 40 Barb. 512, and cases there cited.) The interlocutory judgment should be reversed and the demurrer-sustained, with leave to the plaintiff to amend her complaint on payment of costs. All concurred. Interlocutory judgment reversed and demurrer sustained, with costs of the demurrer and of this appeal, with leave to the plaintiff to amend the complaint on payment of costs within twenty days after service of notice of the entry of this'order.